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Re: [gang8] Ireland falls for Georgism

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  • Dirk Bezemer
    Geoffrey, You forget that the tax effect is relative - to other taxes. The Irish are raising all sorts of taxes (what will happen to their unfair
    Message 1 of 4 , Nov 25, 2010
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      Geoffrey,

      You forget that the tax effect is relative - to other taxes. The Irish
      are raising all sorts of taxes (what will happen to their 'unfair
      competition' incorporation taxes that the Germans moan about?) and other
      payments (such as water) too.

      Given the small property tax increase, property values may not suffer if
      property investment is still more lightly taxed than other investments.

      In fact, you need to extend your argument. Just as any tax ultimately
      falls on income, as you correctly stress, so any budget cut (or subsidy
      reduction) ultimately falls on income. Such income reduction may reduce
      property values just as a 'Georgist' tax does.

      Dirk

      W Gardiner wrote:
      > 101125
      >
      > The Irish government has raised taxes on land and property.
      >
      > Will that lower property values and increase the woes of the banks by putting more borrowers in negative equity?
      >
      > It should do but, we shall have to wait to see if they have cut their own throats. Of course I shall be surprised if they have not.
      >
      > Geoffrey
      >
    • Michael Hudson
      Dear Geoffrey, You would think so, yes: Raising land taxes will leave less rental value to be capitalized into bank loans. A property is worth what a bank will
      Message 2 of 4 , Nov 25, 2010
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        Re: [gang8] Ireland falls for Georgism Dear Geoffrey,
            You would think so, yes: Raising land taxes will leave less rental value to be capitalized into bank loans. A property is worth what a bank will lend — so property prices will decline.
            So who thought up this policy? The banks? The EU that seems to be dictating Irish policy?
            I can’t figure out why Ireland ever trusted the banks to say their condition was fine, and didn’t move to take them over, insure all the retail depositors and write down the balance to what the banks could pay after their kleptocratic owners had emptied them out. This is what the Financial Times has been saying all week long.
            Now it may be too late, because the crooks have taken their money and run. It’s as if Ireland’s neoliberals didn’t realize that the ECB works for the crooks, not for the EU. I hope Europe breaks up if it can’t redo the constitution. As matters stand, it’s becoming a thoroughly criminalized continent, run by irresponsible bankers whose aim is to empty out the economic surplus for themselves. As the FT said the other day, Ireland has converted private bank losses into a permanent tax-loss that will cripple the country for a generation.
            My solution: Let the Irish move to Latvia. This would improve Latvian politics as well as the economy.
        Michael


        On 11/25/10 3:05 AM, "G W Gardiner" <geoffrey.gardiner@...> wrote:


         
         
           


        101125

        The Irish government has raised taxes on land and property.

        Will that lower property values and increase the woes of the banks by putting more borrowers in negative equity?

        It should do but, we shall have to wait to see if they have cut their own throats. Of course I shall be surprised if they have not.

        Geoffrey

           


      • G W Gardiner
        Michael, Most of these points are inline with my other answer. Ireland did rush to guarantee depositors when the crisis struck in 2007, with the intent of
        Message 3 of 4 , Nov 25, 2010
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          Michael,
           
          Most of these points are inline with my other answer.
           
          Ireland did rush to guarantee depositors when the crisis struck in 2007, with the intent of grabbing deposits from British banks, and it worked, a result that now haunts them. British guarantees are now being reduced.
           
          Who are the crooks? One Irish bank is partly owned by RBS, which in 2007 was 46 per cent owned by foreign shareholders, 26 per cent being US.
           
          The laxity in bank regulation was, as in England, deliberate government policy, based on daft economic theory. The crooks therefore were the naive politicians who saw bank profits as manna from heaven, falling on populist free-spending politicians. Really clever capitalists would have taken a far different and more cautious line.
           
          Geoffrey
           
           
          Sent: Thursday, November 25, 2010 1:37 PM
          Subject: Re: [gang8] Ireland falls for Georgism
           
           

          Dear Geoffrey,
              You would think so, yes: Raising land taxes will leave less rental value to be capitalized into bank loans. A property is worth what a bank will lend — so property prices will decline.
              So who thought up this policy? The banks? The EU that seems to be dictating Irish policy?
              I can’t figure out why Ireland ever trusted the banks to say their condition was fine, and didn’t move to take them over, insure all the retail depositors and write down the balance to what the banks could pay after their kleptocratic owners had emptied them out. This is what the Financial Times has been saying all week long.
              Now it may be too late, because the crooks have taken their money and run. It’s as if Ireland’s neoliberals didn’t realize that the ECB works for the crooks, not for the EU. I hope Europe breaks up if it can’t redo the constitution. As matters stand, it’s becoming a thoroughly criminalized continent, run by irresponsible bankers whose aim is to empty out the economic surplus for themselves. As the FT said the other day, Ireland has converted private bank losses into a permanent tax-loss that will cripple the country for a generation.
              My solution: Let the Irish move to Latvia. This would improve Latvian politics as well as the economy.
          Michael


          On 11/25/10 3:05 AM, "G W Gardiner" <geoffrey.gardiner@...> wrote:


           
           
            


          101125

          The Irish government has raised taxes on land and property.

          Will that lower property values and increase the woes of the banks by putting more borrowers in negative equity?

          It should do but, we shall have to wait to see if they have cut their own throats. Of course I shall be surprised if they have not.

          Geoffrey

            


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